It's the Real Estate Agent Who Closes the Deal, Not AI

It's the Real Estate Agent Who Closes the Deal, Not AI

Recently, I encountered an interesting situation that made me reflect on the role of AI in the real estate industry. I was helping a landlord in Markham, and his approach to managing his property was quite different from what I had experienced in the past. He seemed more meticulous, often challenging me on specific terms in each clause of the lease agreement. What stood out was that many of these clauses were identical to those in his previous lease with another tenant. It quickly became clear that he was consulting AI, likely ChatGPT, trying to analyze every detail and explore all possibilities to avoid pursuing tenants who might not meet his expectations.

At first, I understood his curiosity. In today's world, AI is everywhere, helping us make more informed decisions, and it's easy to see why someone might turn to it for support. But as the conversation went on, it became apparent that he wasn't entirely listening to my experience as a seasoned real estate agent. Instead, he seemed more inclined to follow AI's advice, even when it conflicted with my professional judgment. I tried to explain that some clauses suggested by AI were not legal in Ontario, and the price AI referred to was outdated, not reflecting the current market rates. Unfortunately, despite my efforts to convince him otherwise, he didn't acknowledge my advice much.

Eventually, I had to follow his instructions and sent over a counteroffer based on his direction, even though I wasn't fully comfortable with it. Despite all my efforts to keep communication open and work with other agents to move the deal forward, the transaction eventually fell through. It was a frustrating experience, and it left me thinking about how AI is starting to have a significant influence on decision-making, even in areas like real estate.

I can definitely understand why more people are turning to AI. After all, it can improve efficiency and help streamline many of our daily tasks. I'm no exception; I use AI regularly to help me with everything from drafting emails to researching market trends. But even as I embrace the benefits of AI, I've learned that it has limitations. For example, when we're not feeling well, we might turn to AI for medical advice, only to bring a list of suggestions to our doctors. While AI can offer general insights, it's not capable of understanding the nuances of a person's unique symptoms and experiences. Doctors, on the other hand, are trained to make sense of those subtle differences and provide the most appropriate care.

The same applies to real estate. AI can assist with many decisions, from calculating potential rental yields to suggesting lease terms, but it can never fully replace the experience and intuition we as agents develop through years of working with people. We are dealing with individuals, each with their own emotions, preferences, and circumstances. AI might analyze data and suggest solutions based on patterns, but it doesn't have the ability to interpret the human element of each situation. It can't gauge how a tenant feels about a certain property or understand the concerns a landlord may have about a specific tenant.

Moreover, AI is only as good as the data it has access to, and there's a significant risk of misinformation. AI can be misled by outdated or incorrect data available on the internet, which could lead to decisions that aren't aligned with the market reality. This is especially true when it comes to rapidly changing markets like real estate. In real estate, the dynamics shift quickly, and while AI can process vast amounts of data, it might not always have the most up-to-date information. As a result, it may provide advice that isn't in line with the current market conditions.

In my case, even though AI suggested certain lease terms and a rental price, it didn't take into account the latest market trends in Markham. It didn't fully grasp the personal dynamics between the landlord and potential tenants, nor the importance of tailoring the approach based on the landlord's specific needs and emotions. There's a level of empathy and real-time communication that AI simply can't replicate.

While AI can certainly be a useful tool to assist with data-driven tasks and increase efficiency, it's clear that it can't replace the human aspect of our work. In real estate, it's our ability to build relationships, read people, and make judgment calls that ultimately drive success. AI might be able to handle the numbers, but it can't understand the subtle intricacies of human interactions. It's the human touch, our knowledge, experience, and empathy, that makes the real difference.



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